SaaS Customer Retention Requires Ongoing Realization of Value

When we buy something without trying it first, this is based on what I call “Perception of Value.”

When we buy something after trying it, this purchase is based on our “Realization of Value” during the trial.

Makes sense, right? But what about Customer Retention?

Well, as it turns out… real, long-term Customer Retention – the kind we’re looking for – is based on the CONTINUAL Realization of Value by your customer. When Realization of Value stops, that customer is a serious churn threat.

Identify Threats to SaaS Customer Retention

They will drive up your SaaS churn rate when they leave – stop paying you, decide not to renew, etc. – if they continue to fail to Realize Value from your service.

They might leave immediately or they could leave as soon as a “reason” – legit or not – comes up.

And the biggest problem is that you didn’t see it coming… but you could’ve. No… you should’ve seen it coming!

Look… a good User Experience only goes so far.

A fancy UI or slick UX is great and might get the customer excited and initially engaged, but that only goes so far, too.

It is the continued Realization of Value that is absolutely the key to retaining customers for a long time.

And the kind of Retention I’m talking about isn’t just about keeping customers paying…

…it’s about ensuring they continue to get value from their use of your service so they’ll actually keep paying for a long time and – over time – pay you MORE for the privilege of using your service.

Long-term Success Requires Long-term SaaS Customer Retention

So, when a customer stops giving you their money, that means they’ve stopped receiving value from your service.

Of course, failure to get value from your service didn’t just happen right before they churned out… when they quit using your service and stopped paying you money.

Quite the opposite, actually… it’s probably been happening for a while; they’ve been realizing less and less value from your service over time and you just didn’t recognize it and – even worse – did nothing to change their experience.

Now they aren’t your customer anymore.

So the big questions are:

Is there anything we could have done to keep this from happening?

Could we have known the customer wasn’t getting value earlier and taken action to remedy the situation before it was too late?

Could we have done more to better manage expectations about the type of value they would receive from the service?

Could we have figured out sooner that the customer was likely to leave based on their activity?

What if we knew that they never really got started using our service and could correlate that to others who also churned out?

What if we could categorize customers into specific groups – called cohorts – so that when some decide to leave, we just let ’em… but when others start to leave or are a churn threat – perhaps those that spent or will spend a lot of money with us – we can react quickly to ensure they stick around?

What if, indeed.

Let’s Improve your SaaS Customer Retention

For immediate consultation and advice on improving Customer Retention, schedule at least a 15-minute meeting with me via Clarity. If you feel a more involved engagement is required for me to help you, email me with the specifics of your situation (as much detail as you’re comfortable giving) and we’ll setup a meeting to work through the particulars.

I am a Customer Success-driven Growth Consultant. I wrote the Customer Success book which you can buy at Amazon. If you need help growing your SaaS, request at least a 15-minute call with me via Clarity. Be sure to join my mailing list - I send awesome stuff to the list every week or so. Also, connect with me on LinkedIn or follow me on Twitter.

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